It will also increase the value of assets, so assets account will be debited as the rule for assets goes ‘debit the increase’. TAXPAYERS General … It is just possible that value of certain assets such as land and building may increase. An asset’s value may never be restated to reflect appreciation … GAAP requires historical cost reporting because the cost is verifiable and reliable. In 2003, revenue from Land Appreciation Tax amounted to 3.73 billion yuan, accounting for 0.2% of the country's total tax revenue. Land is not depreciated because land is assumed to have an unlimited useful life. Land is not depreciated because land is assumed to have an unlimited useful life. This increase in the value is gain, so it will be credited. Accounting for the sale of land differs from the accounting for the sale of any other type of fixed asset, because there is no accumulated depreciation expense to remove from the accounting records.This is because land is not depreciated, on the theory that land is not consumed (as is the case with other fixed assets).. It will also increase the value of assets, so assets account will be debited as the rule for assets goes ‘debit the increase’.
The revenue collected belongs to the local governments. Land Appreciation Tax is administered by the local tax bureaus. Generally accepted accounting principles (GAAP) require that the balance sheet present items at the cost originally paid for the asset. For completed properties, the deductible amount is the sum of purchased price and taxes paid. APPRECIATION IN THE VALUE OF ASSETS. Therefore, the costs of those assets must be allocated to those limited accounting periods. The gain is calculated based on the "land value appreciation amount", which is the excess of the consideration received from the … Land appreciation tax is levied from 30% to 60% on gain on disposal of landed properties with reference to the percentage of appreciated value over the deductible amount. A company can account for changes in the market value of its various fixed assets by conducting a revaluation of the fixed assets. Land appreciation tax - a tax levied on the gains realized from real property transactions at progressive rates ranging from 30% to 60%. APPRECIATION IN THE VALUE OF ASSETS. In accounting, not all gains in asset value qualify as appreciation. In contrast, the market value is subjective: one person thinks the land is worth $1 million while another thinks it's worth $1.5 million. However, you may write down, or reduce, the value of land if you believe environmental or regulatory conditions have adversely affected the property's worth.
Increasing value is due to market or other economic factors, such as increasing demand, or scarcity.

It is just possible that value of certain assets such as land and building may increase. Land is an asset of the company which is having the unlimited useful life, therefore, no depreciation is applicable to the land unlike the other long term assets such as buildings, furniture, etc which have the limited useful life and hence their costs to be allocated to the accounting period in which they are of some use to the company. The IRS and financial accounting rules do not allow land depreciation. Land Depreciation. In accounting, appreciation refers to the positive adjustment made to the initially booked value of an asset Financial Assets Financial assets refer to assets that arise from contractual agreements on future cash flows or from owning equity instruments of another entity.